Bank officer making loan to uncreditworthy individual and deriving personal benefit from that loan does not commit criminal act under 18 U.S.C. § 656

STATUTORY CONSTRUCTION/SENTENCING United States v. Flanders, No. 05-6379, ___ F.3d ___ (10th Cir. Jul 3, 2007)(W.D. Oklahoma). Appeal of convictions for willful misapplication of bank funds in violation of 18 U.S.C. § 656, scheming to defraud a bank in violation of 18 U.S.C. § 1344(1), making a false entry in a bank record in violation of 18 U.S.C. § 1005, and conspiring to make a false statement to a bank, in violation of 18 U.S.C. § 1014. HELD: (1) In the absence of additional circumstances, 18 U.S.C. § 656 does not criminalize making a loan to an uncreditworthy individual even where bank officer making the loan derives personal benefit. (2) Where negotiated memorandum of understanding between bank and Office of Comptroller of Currency stated that acquisition or sale of any fixed assets owned by bank involving more than $2,500 “should” require prior board of directors approval, and defendant attempted to sell bank’s building without such approval, district court erred in imposing two-level sentencing enhancement under U.S.S.G. § 2F1.1(b)(4)(B) for violation of regulatory agency’s administrative order. Read the opinion here.